More than 32 million Americans are receiving some form of unemployment benefits, according to data released by the Labor Department on Thursday.
Why it matters: Tens of millions of jobless Americans will soon have a smaller cash cushion — as coronavirus cases surge and certain parts of the country re-enter pandemic lockdowns — barring an extension of the more generous unemployment benefits that are set to expire at the end of the month.
- Over 17 million continue to claim traditional unemployment benefits.
- Another roughly 15 million are on the rolls of other unemployment programs, including the Pandemic Unemployment Assistance (PUA), which was established under the CARES Act to help gig workers and the self-employed.
What it means: Continued unemployment claims reflect the number of people continuing to receive unemployment benefits after initially applying.
- Consistent drops in this figure are an indication that a strong enough wave of Americans are falling off the rolls of unemployment — and possibly returning back to work.
By the numbers: The number of jobless Americans continuing to receive traditional unemployment has steadily dropped from its peak at 25 million in early May, but remains devastatingly high.
- The pre-pandemic record for the number of Americans on the ranks of unemployment was 6.5 million, set in June 2009.
- The Labor Department also said there were another 1.3 millionnewly filed unemployment applications last week, resulting in the smallest week-over-week decline since March, per Bloomberg. Continued claims lag this data by an additional week.
What's next: Next week is the last that unemployed workers are eligible to apply for the additional $600 per week in unemployment benefits authorized under the federal stimulus bill. It's unclear whether Congress will extend the extra payments.
- The expanded benefits are a big reason, along with the one-time stimulus checks, why incomes have been buoyed amid the worst bout of unemployment in U.S. history. Even so, millions report concerns about their ability to continue paying bills, including rent.
Worth noting: For months, the weekly unemployment report has shown the same story.
- Millions continue to seek unemployment as the labor market is pummeled by the coronavirus pandemic, while the monthly government jobs report simultaneously shows millions of jobs added.
Be smart: The weekly unemployment claims report is timelier than those the monthly jobs report, but also imperfect for a granular read on the labor market. There are a few factors are at play:
- It doesn’t give a clear picture of who’s being hired, only those that have lost work and need to rely on unemployment.
- There are unknowns. Are new applications rising or falling because there was a real shift that week in the labor market? Or because overwhelmed state labor departments are working through — or still behind on — backlogs of applications?
- The data has been incomplete. Until recently, some states like Florida didn't begin disclosing the number of people applying to and receiving benefits from PUA effectively warping the total figures.
- Double counting. In states like Georgia, people who wanted to apply for PUA first had to file for regular unemployment, be rejected and then apply forPUA.
The bottom line: The coronavirus pandemic has pushed more Americans than ever before to the unemployment lines — and their weekly payments may soon become smaller.
